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. Last Updated: 07/27/2016

Russia to Take Out $16.9Bln In Local Loans

Russia will borrow 560 billion rubles ($16.9 billion) on the local debt market this year as the country faces a 2009 budget deficit that could rise above its planned 8 percent limit, Finance Minister Alexei Kudrin said Sunday in Washington.

The budget will have to cover a pension system deficit of more than 1 trillion rubles next year as payments are raised to meet the regional minimum subsistence level, Kudrin said. The figure represents the difference between the regional subsistence minimum and the lowest pensions under the current system.

Kudrin also said the country's sovereign ruble bonds would see increased demand this year from commercial banks looking for liquid securities as the percentage of bad loans increases.

"Banks are forced to increase their provisions, which they need to keep in highly liquid securities. Therefore, the demand for state bonds will rise," Kudrin told reporters, Reuters reported.

Earlier this month, Gazprom sold $2.25 billion worth of 10-year eurobonds, making it the first Russian company to issue a eurobond since last summer.

While the bond's oversubscription pushed the company to issue an additional $250 million of notes, the deal's underwriter, Credit Suisse, may be responsible for buying as much as $1 billion of the issue, Vedomosti reported Monday.